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     **Section 2.8.**“**Company**” means TranS1 Inc., a Delaware corporation, or any entity that is asuccessor to the Company.     **Section 2.9.**“**Compensation**” means an Employee’s base straight time gross earnings, commissions(to the extent such commissions are an integral, recurring part of compensation), overtime andshift premium, but exclusive of payments for incentive compensation, bonuses and othercompensation.     **Section 2.10.**“**Designated Subsidiary**” means any Subsidiary that has been designated by theAdministrator from time to time in its sole discretion as eligible to participate in the Plan.     **Section 2.11.**“**Director**” means a member of the Board.     **Section 2.12.**“**Eligible Employee**” means any individual who is a common law employee of anEmployer and is customarily employed for at least twenty (20) hours per week and more than five (5)months in any calendar year by the Employer. For purposes of the Plan, the employment relationshipwill be treated as continuing intact while the individual is on sick leave or other leave ofabsence that the Employer approves. Where the period of leave exceeds ninety (90) days and theindividual’s right to reemployment is not guaranteed either by statute or by contract, theemployment relationship will be deemed to have terminated on the ninety-first (91st) day of suchleave. The Administrator, in its discretion, from time to time may, prior to an Offering Date forall options to be granted on such Offering Date, determine (on a uniform and nondiscriminatorybasis) that the definition of Eligible Employee will or will not include an individual if he orshe: (i) has not completed at least two years of service since his or her last hire date (or suchlesser period of time as may be determined by the Administrator in its discretion), (ii)customarily works not more than twenty (20) hours per week (or such lesser period of time as may bedetermined by the Administrator in its discretion), (iii) customarily works not more than five (5)months per calendar year (or such lesser period of time as may be determined by the Administratorin its discretion), (iv) is an officer or other manager, or (v) is a highly compensated employeeunder Section 414(q) of the Code.     **Section 2.13.**“**Employer**” means any one or all of the Company and its Designated Subsidiaries.     **Section 2.14.**“**Exchange Act**” means the Securities Exchange Act of 1934, as amended, includingthe rules and regulations promulgated thereunder.     **Section 2.15.**“**Exercise Date**” means the last day of each Offering Period.     **Section 2.16.**“**Fair Market Value**” means, as of any date and unless the Administratordetermines otherwise the value of Common Stock determined as follows:          **(a)**If the Common Stock is then listed or admitted to trading on a stock exchange whichreports closing sale prices, the Fair Market Value shall be the closing sale price on the date ofvaluation on such principal stock exchange on which the Common Stock is then listed or admitted totrading, or, if no closing sale price is quoted on such day, then the Fair Market Value shall bethe closing sale price of the Common Stock on such exchange on the next preceding day on which aclosing sale price is reported;
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          **(b)**If the Common Stock is not then listed or admitted to trading on a stock exchange whichreports closing sale prices, the Fair Market Value shall be the average of the closing bid andasked prices of the Common Stock in the over the counter market on the date of valuation; or          **(c)**If neither (a) nor (b) is applicable as of the date of valuation, then the Fair MarketValue shall be determined by the Administrator in good faith using any reasonable method ofevaluation, which determination shall be conclusive and binding on all interested parties.     **Section 2.17.**“**Fiscal Year**” means the fiscal year of the Company.     **Section 2.18.**“**Offering Date**means the first day of each Offering Period.     **Section 2.19.**“**Offering Periods**” means the periods of approximately six months during which anoption granted pursuant to the Plan may be exercised, (i) commencing on the first Trading Day on orafter June 1 of each year and terminating on the first Trading Day on or following November 30,approximately six months later, and (ii) commencing on the first Trading Day on or after December 1of each year and terminating on the first Trading Day on or following May 31, approximately sixmonths later. The duration and timing of Offering Periods may be changed pursuant to Sections 4and 20.     **Section 2.20.**“**Parent**” means a “parent corporation,” whether now or hereafter existing, asdefined in Section 424(e) of the Code.     **Section 2.21.**“**Plan**” means this TranS1 Inc. 2007 Employee Stock Purchase Plan.     **Section 2.22. “Purchase Price”**means an amount equal to eighty-five percent (85%) of the FairMarket Value of a share of Common Stock on the Exercise Date; provided however, that the PurchasePrice may be determined for subsequent Offering Periods by the Administrator subject to compliancewith Section 423 of the Code (or any successor rule or provision or any other applicable law,regulation or stock exchange rule) or pursuant to Section 20.     **Section 2.23.**“**Subsidiary**” means a “subsidiary corporation,” whether now or hereafterexisting, as defined in Section 424(f) of the Code.     **Section 2.24.**“**Trading Day**” means a day on which the national stock exchange upon which theCommon Stock is listed is open for trading.**ARTICLE 3.****ELIGIBILITY**     **Section 3.1.**Each Employee of the Company or any of its operating subsidiaries, who, on theOffering Date, is an Eligible Employee may become a participant in the Plan on the Offering Datecoincident with or next following his satisfaction of the requirements of becoming an EligibleEmployee.     **Section 3.2.**Any Eligible Employee on a given Offering Date will be eligible to participate inthe Plan, subject to the requirements of Section 5.
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     **Section 3.3.**Any provisions of the Plan to the contrary notwithstanding, no Eligible Employeewill be granted an option under the Plan (i) to the extent that, immediately after the grant, suchEligible Employee (or any other person whose stock would be attributed to such Eligible Employeepursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent orSubsidiary of the Company and/or hold outstanding options to purchase such stock possessing fivepercent (5%) or more of the total combined voting power or value of all classes of the capitalstock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that hisor her rights to purchase stock under all employee stock purchase plans (as defined in Section 423of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate whichexceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Valueof the stock at the time such option is granted) for each calendar year in which such option isoutstanding at any time.**ARTICLE 4.****OFFERING PERIODS**     **Section 4.1.**The Plan will be implemented by consecutive Offering Periods with a new OfferingPeriod commencing on the first Trading Day on or after June 1 and December 1 each year, or on suchother date as the Administrator will determine; provided, however, the first Offering Period forwhich this Plan is being implemented shall commence on January 15, 2011. The Administrator willhave the power to change the duration of Offering Periods (including the commencement datesthereof) with respect to future offerings without stockholder approval if such change is announcedprior to the scheduled beginning of the first Offering Period to be affected thereafter.**ARTICLE 5.****PARTICIPATION**     **Section 5.1.**An Eligible Employee will be entitled to continue to participate in an OfferingPeriod pursuant to Section 3.1 only if such individual submits a subscription agreement authorizingpayroll deductions in a form determined by the Administrator (which may be similar to the formattached hereto as Exhibit A) to the Company’s designated plan administrator (i) no earlier thanthe effective date of the Form S-8 registration statement with respect to the issuance of CommonStock under this Plan and (ii) no later than five (5) business days following the effective date ofsuch S-8 registration statement or such other period of time as the Administrator may determine(the “Enrollment Window”).     **Section 5.2.**An Eligible Employee may participate in the Plan pursuant to Section 3(b) by (i)submitting to the Company’s payroll office (or its designee), on or before a date prescribed by theAdministrator prior to an applicable Offering Date, a properly completed subscription agreementauthorizing payroll deductions in the form provided by the Administrator for such purpose, or (ii)following an electronic or other enrollment procedure prescribed by the Administrator.
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**ARTICLE 6.****PAYROLL DEDUCTIONS**     **Section 6.1.**At the time a participant enrolls in the Plan pursuant to Section 5, he or shewill elect to have payroll deductions made on each pay day during the Offering Period in an amountnot exceeding ten percent (10%) of the Compensation which he or she receives on each pay day duringthe Offering Period; provided, however, that should a pay day occur on an Exercise Date, aparticipant will have the payroll deductions made on such day applied to his or her account underthe subsequent Offering Period. A participant’s subscription agreement will remain in effect forsuccessive Offering Periods unless terminated as provided in Section 10 hereof.     **Section 6.2.**Payroll deductions for a participant will commence on the first pay day followingthe Offering Date and will end on the last pay day prior to the Exercise Date of such OfferingPeriod to which such authorization is applicable, unless sooner terminated by the participant asprovided in Section 10 hereof, provided, however, that for the first Offering Period, payrolldeductions will commence on the first pay day on or following the end of the Enrollment Window.     **Section 6.3.**All payroll deductions made for a participant will be credited to his or heraccount under the Plan and will be withheld in whole percentages only. A participant may not makeany additional payments into such account.     **Section 6.4.**A participant may discontinue his or her participation in the Plan as provided inSection 10, or may increase or decrease the rate of his or her payroll deductions during theOffering Period by (i) properly completing and submitting to the Company’s payroll office (or itsdesignee), on or before a date prescribed by the Administrator prior to an applicable ExerciseDate, a new subscription agreement authorizing the change in payroll deduction rate in the formprovided by the Administrator for such purpose, or (ii) following an electronic or other procedureprescribed by the Administrator; provided, however, that a participant may only make one payrolldeduction change during each Offering Period. If a participant has not followed such procedures tochange the rate of payroll deductions, the rate of his or her payroll deductions will continue atthe originally elected rate throughout the Offering Period and future Offering Periods (unlessterminated as provided in Section 10). The Administrator may, in its sole discretion, limit thenature and/or number of payroll deduction rate changes that may be made by participants during anyOffering Period. Any change in payroll deduction rate made pursuant to this Section 6.4 will beeffective as of the first full payroll period following five (5) business days after the date onwhich the change is made by the participant (unless the Administrator, in its sole discretion,elects to process a given change in payroll deduction rate more quickly).     **Section 6.5.**Notwithstanding the foregoing, to the extent necessary to comply with Section423(b)(8) of the Code and Section 3.3, a participant’s payroll deductions may be decreased to zeropercent (0%) at any time during an Offering Period. Subject to Section 423(b)(8) of the Code andSection 3.3 hereof, payroll deductions will recommence at the rate originally elected by theparticipant effective as of the beginning of the first Offering Period in which the employee firstparticipates in the Plan which is scheduled to end in the following calendar year, unlessterminated by the participant as provided in Section 10.     **Section 6.6.**At the time the option is exercised, in whole or in part, or at the time some orall of the Common Stock issued under the Plan is disposed of, the participant must make adequate
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provision for the Company’s or Employer’s federal, state, or any other tax liability payableto any authority, national insurance, social security or other tax withholding obligations, if any,which arise upon the exercise of the option or the disposition of the Common Stock. At any time,the Company or the Employer may, but will not be obligated to, withhold from the participant’scompensation the amount necessary for the Company or the Employer to meet applicable withholdingobligations, including any withholding required to make available to the Company or the Employerany tax deductions or benefits attributable to a sale or early disposition of Common Stock by theEligible Employee.**ARTICLE 7.****GRANT OF OPTION**     **Section 7.1.**On the Offering Date of each Offering Period, each Eligible Employeeparticipating in such Offering Period will be granted an option to purchase on each Exercise Dateduring such Offering Period (at the applicable Purchase Price) up to a number of shares of CommonStock determined by dividing such Eligible Employee’s payroll deductions accumulated prior to suchExercise Date and retained in the Eligible Employee’s account as of the Exercise Date by theapplicable Purchase Price; provided that in no event will an Eligible Employee be permitted topurchase during each Offering Period more than 10,000 shares of the Common Stock (subject to anyadjustment pursuant to Section 19), and provided further that such purchase will be subject to thelimitations set forth in Sections 3.3 and 13. The Eligible Employee may accept the grant of suchoption with respect to the first Offering Period by submitting a properly completed subscriptionagreement in accordance with the requirements of Section 5.1 on or before the last day of theEnrollment Window, and (ii) with respect to any future Offering Period under the Plan, by electingto participate in the Plan in accordance with the requirements of Section 5.2. The Administratormay, for future Offering Periods, increase or decrease, in its absolute discretion, the maximumnumber of shares of Common Stock that an Eligible Employee may purchase during each Offering Periodof an Offering Period. Exercise of the option will occur as provided in Section 8, unless theparticipant has withdrawn pursuant to Section 10. The option will expire on the last day of theOffering Period.**ARTICLE 8.****EXERCISE OF OPTION**     **Section 8.1.**Unless a participant withdraws from the Plan as provided in Section 10, his orher option for the purchase of shares of Common Stock will be exercised automatically on theExercise Date, and the maximum number of full shares subject to option will be purchased for suchparticipant at the applicable Purchase Price with the accumulated payroll deductions in his or heraccount. No fractional shares of Common Stock will be purchased; any payroll deductionsaccumulated in a participant’s account which are not sufficient to purchase a full share will beretained in the participant’s account for the subsequent Offering Period, subject to earlierwithdrawal by the participant as provided in Section 10. Any other funds left over in aparticipant’s account after the Exercise Date will be returned to the participant. During aparticipant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only byhim or her.     **Section 8.2.**If the Administrator determines that, on a given Exercise Date, the number ofshares of Common Stock with respect to which options are to be exercised may exceed the number ofshares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator
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may in its sole discretion provide that the Company will make a pro rata allocation of theshares of Common Stock available for purchase on such Exercise Date, in as uniform a manner as willbe practicable and as it will determine in its sole discretion to be equitable among allparticipants exercising options to purchase Common Stock on such Exercise Date, and continue allOffering Periods then in effect or terminate all Offering Periods then in effect pursuant toSection 20. The Company may make a pro rata allocation of the shares available on the OfferingDate of any applicable Offering Period pursuant to the preceding sentence, notwithstanding anyauthorization of additional shares for issuance under the Plan by the Company’s stockholderssubsequent to such Offering Date.**ARTICLE 9.****DELIVERY**     **Section 9.1.**As soon as reasonably practicable after each Exercise Date on which a purchase ofshares of Common Stock occurs, the Company will arrange the delivery to each participant the sharespurchased upon exercise of his or her option in a form determined by the Administrator (in its solediscretion) and pursuant to rules established by the Administrator. The Company may permit orrequire that shares be deposited directly with a broker designated by the Company or to adesignated agent of the Company, and the Company may utilize electronic or automated methods ofshare transfer. The Company may require that shares be retained with such broker or agent for adesignated period of time and/or may establish other procedures to permit tracking of disqualifyingdispositions of such shares. No participant will have any voting, dividend, or other stockholderrights with respect to shares of Common Stock subject to any option granted under the Plan untilsuch shares have been purchased and delivered to the participant as provided in this Section 9.1.**ARTICLE 10.****WITHDRAWAL**     **Section 10.1.**A participant may withdraw all but not less than all of the payroll deductionscredited to his or her account and not yet used to exercise his or her option under the Plan at anytime by (i) submitting to the Company’s payroll office (or its designee) a written notice ofwithdrawal in the form prescribed by the Administrator for such purpose, or (ii) following anelectronic or other withdrawal procedure prescribed by the Administrator. All of the participant’spayroll deductions credited to his or her account will be paid to such participant promptly afterreceipt of notice of withdrawal and such participant’s option for the Offering Period will beautomatically terminated, and no further payroll deductions for the purchase of shares will be madefor such Offering Period. If a participant withdraws from an Offering Period, payroll deductionswill not resume at the beginning of the succeeding Offering Period, unless the participantre-enrolls in the Plan in accordance with the provisions of Section 5.     **Section 10.2.**A participant’s withdrawal from an Offering Period will not have any effect uponhis or her eligibility to participate in any similar plan which may hereafter be adopted by theCompany or in succeeding Offering Periods which commence after the termination of the OfferingPeriod from which the participant withdraws.
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**ARTICLE 11.****TERMINATION OF EMPLOYMENT**     **Section 11.1.**Upon a participant’s ceasing to be an Eligible Employee, for any reason, he orshe will be deemed to have elected to withdraw from the Plan and the payroll deductions credited tosuch participant’s account during the Offering Period but not yet used to purchase shares of CommonStock under the Plan will be returned to such participant or, in the case of his or her death, tothe person or persons entitled thereto under Section 15, and such participant’s option will beautomatically terminated.**ARTICLE 12.****INTEREST**     **Section 12.1.**No interest will accrue on the payroll deductions of a participant in the Plan.**ARTICLE 13.****STOCK**     **Section 13.1.**Subject to adjustment upon changes in capitalization of the Company as providedin Section 19 hereof, the maximum number of shares of Common Stock which will be made available forsale under the Plan will be 250,000 shares, plus an annual increase to be added on the first day ofeach Fiscal Year beginning with the 2011 Fiscal Year, equal to the least of (i) two percent (2%) ofthe outstanding shares of Common Stock on such date or (ii) an amount determined by theAdministrator.     **Section 13.2.**Until the shares are issued (as evidenced by the appropriate entry on the booksof the Company or of a duly authorized transfer agent of the Company), a participant will only havethe rights of an unsecured creditor with respect to such shares, and no right to vote or receivedividends or any other rights as a stockholder will exist with respect to such shares.     **Section 13.3.**Shares of Common Stock to be delivered to a participant under the Plan will beregistered in the name of the participant or in the name of the participant and his or her spouse.**ARTICLE 14.****ADMINISTRATION**     **Section 14.1.**The Plan will be administered by the Board or a Committee appointed by theBoard, which Committee will be constituted to comply with Applicable Laws. The Administrator willhave full and exclusive discretionary authority to construe, interpret and apply the terms of thePlan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Everyfinding, decision and determination made by the Administrator will, to the full extent permitted bylaw, be final and binding upon all parties. Notwithstanding any provision to the contrary in thisPlan, the Administrator may adopt rules or procedures relating to the operation and administrationof the Plan to accommodate the specific requirements of local laws and procedures for jurisdictionsoutside of the United States. Without limiting the generality of the foregoing, the Administratoris
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specifically authorized to adopt rules and procedures regarding eligibility to participate,the definition of Compensation, handling of payroll deductions, making of contributions to the Plan(including, without limitation, in forms other than payroll deductions), establishment of bank ortrust accounts to hold payroll deductions, payment of interest, conversion of local currency,obligations to pay payroll tax, determination of beneficiary designation requirements, withholdingprocedures and handling of stock certificates which vary with local requirements.**ARTICLE 15.****DESIGNATION OF BENEFICIARY**     **Section 15.1.**A participant may file a designation of a beneficiary who is to receive anyshares of Common Stock and cash, if any, from the participant’s account under the Plan in the eventof such participant’s death subsequent to an Exercise Date on which the option is exercised butprior to delivery to such participant of such shares and cash. In addition, a participant may filea designation of a beneficiary who is to receive any cash from the participant’s account under thePlan in the event of such participant’s death prior to exercise of the option. If a participant ismarried and the designated beneficiary is not the spouse, spousal consent will be required for suchdesignation to be effective.     **Section 15.2.**Such designation of beneficiary may be changed by the participant at any time bynotice in a form determined by the Administrator. In the event of the death of a participant andin the absence of a beneficiary validly designated under the Plan who is living at the time of suchparticipant’s death, the Company will deliver such shares and/or cash to the executor oradministrator of the estate of the participant, or if no such executor or administrator has beenappointed (to the knowledge of the Company), the Company, in its discretion, may deliver suchshares and/or cash to the spouse or to any one or more dependents or relatives of the participant,or if no spouse, dependent or relative is known to the Company, then to such other person as theCompany may designate.     **Section 15.3.**All beneficiary designations will be in such form and manner as theAdministrator may designate from time to time.**ARTICLE 16.****TRANSFERABILITY**     **Section 16.1.**Neither payroll deductions credited to a participant’s account nor any rightswith regard to the exercise of an option or to receive shares of Common Stock under the Plan may beassigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws ofdescent and distribution or as provided in Section 15 hereof) by the participant. Any such attemptat assignment, transfer, pledge or other disposition will be without effect, except that theCompany may treat such act as an election to withdraw funds from an Offering Period in accordancewith Section 10 hereof.
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**ARTICLE 17.****USE OF FUNDS**     **Section 17.1.**The Company may use all payroll deductions received or held by it under the Planfor any corporate purpose, and the Company will not be obligated to segregate such payrolldeductions. Until shares of Common Stock are issued, participants will only have the rights of anunsecured creditor with respect to such shares.**ARTICLE 18.****REPORTS**     **Section 18.1.**Individual accounts will be maintained for each participant in the Plan.Statements of account will be given to participating Eligible Employees at least annually, whichstatements will set forth the amounts of payroll deductions, the Purchase Price, the number ofshares of Common Stock purchased and the remaining cash balance, if any.**ARTICLE 19.****ADJUSTMENTS, DISSOLUTION, LIQUIDATION,**